There is no reason to be sad. You should be glad during the time of consolidation, the trading price is above RM0.475. Whenever the is a seller, always remember there is a buyer. If the buyer is buying above RM0.475 VWAP. Then chances are, these buyer is the seller of higher price in the future price. Chill...
Observing this few days oil price uptrend more than 10%, but all oil stocks seem hard to move or no dropping. Feel KNM also hard to break RM0.555 too ...
KNM has joined forces with Ho Hup to undertake engineering, procurement, construction and commissioning (EPCC) contracts, both within and outside the country.
Ho Hup used to have experience in building O&G pipeline throughout Malaysia. And KNM forte is really process engineering and their heat exchanger by Bosig is the top in the world. There is no reason to announce JV without having any potential or possibly close to secure a project. Bear in mind, they are targeting EPCC contract. The sum of the contract could be major. Something everyone should be aware of.
Management targeting RM120m-RM130m core PAT (excluding deferred taxes) for FY16E, or implied 50% Y/Y growth. Questionable if those numbers are achievable on a core basis (reported numbers are skewed by deferred taxes, one-offs and forex matters). But if they are and pegging 10x P/E, stock’s fair value is 56 sen.
A difficult call on this name but believe sustainable re-rating needs to be accompanied by i) earnings delivery, ii) more contract wins and ii) recovery in oil prices.
Pensel Rotan:- yeah, you are right. The result is skewed by deferred tax but if you notice from the latest financial statement, they already started to guide investors what's the core earning excluding deferred tax. That's good.
Another good thing despite the skewed result is, they will have very strong cash flow coming from higher profitability. Many people don't realized it.
Watch up for more favorable announcement soon. I'm looking at > RM0.65 this year.
Because people are worried of the volatility of the oil price. At the end of the day, if oil price stays above RM35-40 per barrel.. everyone will start to ignore the worry. It is just a matter of time before, investors start to show interest in O&G counter.
That is just the start of new contract flow for this JV. What all should be looking forward is the potential award of contract that involve Engineering, Procurement, Construction and Commissioning Project (EPCC). That is the goal of the JV when they announced in Bursa and I highlighted that KNM won't form a JV without visibility of securing contract. What you have seen from Sinopec is just the tip of the iceberg.
KNM is involved in industrial engineering, building refineries, environment engineering, waste water management bio mass plants and any thing to do with heavy engineering.
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
MC88
642 posts
Posted by MC88 > 2016-03-07 20:05 | Report Abuse
Sad